Financial and operational performance of banks in Ghana: 2004-2012

The study examines the empirical and financial performance of the leading major banks in Ghana over the period of 2004-2012 based on their financial statements. On the basis of profitability and cost based parameters, the leading six (6) major banks were investigated. The banks were used for the study because they control about 42.5% of the share of industry total assets and 42.2% of the industry's deposits. An empirical study was conducted on the performance of the six (6) major banks based on their profitability margins and operating cost parameters. In analyzing the banks' performance, comparisons were made with major banks from developed countries as well as banks from emerging market economies to verify the Ghanaian banking sector performance with banks from developed and emerging market economies. The study concluded that Ghanaian banks recorded a higher profitability margins than banks from developed economies due to relatively less competition of the banking sector 42.2% of the share of industry total assets is being controlled by few major banks. Inter-bank performance indicated that foreign owned banks were profitable and efficient than domestic banks and this was due to profitable line of business and economies of scale. Finally, the study further establishes that the banks needed to expand their operations to embrace the large number of the people who are not saving with formal banks which will enhance performance growth and development of the banking sector. --Leaf iii.